A Mean-Spirited Budget Proposal from Washington

On February 12, the White House released its $4.4 trillion proposal for the 2019 federal budget, which calls for many of the same deep cuts to health, housing, and education that the President proposed for 2018. Presidential budget proposals are often “big picture” priorities that gain little traction, since Congress sets the actual budget. But some of what the White House has in mind has already been pushed by high-ranking lawmakers in the U.S. Senate and House and should not be shrugged off.

The White House proposal would add $7 trillion to the national debt by the end of the coming decade, making it crystal-clear that a balanced federal budget is no longer a priority for the President. The federal tax cuts enacted in December 2017, combined with the President’s proposed increases for military spending, a Mexican-U.S. border wall, and infrastructure, would widen annual deficits, even if Congress enacted the $3 trillion in cuts that the White House proposes. Experts in Washington, D.C. predict that most of the White House’s domestic spending cuts will go nowhere, but some aspects of the President’s proposals for Medicaid and food assistance resemble what some congressional leaders have proposed. So there are plenty of reasons to stay alert as the federal budget process and other legislative debates continue in the U.S. House and Senate.

One reason to keep an eye on federal budget proposals is the potential harmful effect on state and local public services. This includes funding for schools, child care assistance, water treatment plant construction, police departments, and much more. In Texas, 33 percent of the state’s 2018 budget is federal dollars. At the local level, federal dollars accounted for four percent of Texas counties’ general revenue and five percent of cities’ revenue in 2012. More recent data (2015-16) for Texas school districts indicates that one in ten public education dollars comes from federal grants.

Here are a few examples of what’s at stake in Texas:

Health care

For health and human services in the state budget, the 2018 share of federal funding is 55 percent. This federal aid matters because it means that state agencies are able to provide health care, foster care and other critical services to many more Texans than could be reached with state tax dollars alone.

Medicaid – by far the biggest federal grant in the Texas budget – would see massive cuts compared to current law if the White House’s or similar proposals to turn it into a block grant were approved by Congress. Over half of all births in Texas are paid for by Medicaid. President Trump proposes cutting Medicaid through a block grant that would cap the amount of money we receive for Medicaid, regardless of the need, and allow Medicaid to grow only at the much lower rate of consumer inflation (the CPI-U) rather than medical inflation. This would jeopardize health care for over 4 million Texans.

States would also be able to require work programs for parents and other adults and reinstate antiquated policies to deny coverage for low-income children or adults based on savings or the value of the family car. The White House also proposes to repeal the Affordable Care Act’s Medicaid expansions and to eliminate federal protections for people with pre-existing conditions by passing the 2017 Cassidy-Graham bill.

Food and Nutrition

President Trump’s 2019 budget proposes to cut the Supplemental Nutrition Assistance Program (SNAP, formerly food stamps) by more than $213 billion over the next ten years — nearly a 30 percent cut. The budget proposes fundamentally restructuring how SNAP benefits are provided. Instead of families going to their local supermarket to buy food, the White House proposes a cumbersome new bureaucracy that would provide government food boxes. This unprecedented proposal puts access to food at risk for one in seven Texans on the faulty assumption that government can buy and provide food more efficiently than millions of American households. SNAP helps keep 4 million Texans from worrying about where their next meal will come from, and it’s a critical program to maintain and expand.

For public education: stagnant aid and vouchers

The two largest grants that pay for public elementary and secondary education – Title I for low-income students, and IDEA for special education – would increase by only 0.5 percent in 2019, compared to their 2017 levels. For Texas, this is not enough to keep up with enrollment growth and increased need among schools. The White House would eliminate another 17 grants completely. Meanwhile, the President’s budget would create a $500 million “school choice” grant program, which means school vouchers, on top of the favorable treatment that some families paying for private school tuition received in the December 2017 tax changes.

Temporary Assistance for Needy Families

More than 20 years ago, the Aid to Families with Dependent Children Program was replaced with a block grant, which the White House would now cut by almost 10 percent in 2019. A separate contingency fund under the Temporary Assistance for Needy Families (TANF) program would be completely eliminated. Cuts to TANF, as well as White House proposals that would require spending 30 percent of TANF funds to educate, train, and provide work supports to adult cash welfare recipients, would pose problems for Texas. Texas has almost no adults receiving cash assistance and spends the lion’s share of its TANF block grant on child protective services and foster care. Less federal help for child protection would require Texas to increase state-tax support, or make significant cuts.

Other Critical Housing and Social Service Programs

The President’s proposal cuts rental assistance programs, assuming state and local governments will pick up a bigger share of the tab for affordable housing. It would also completely eliminate the Social Services Block Grant, the Community Development Block Grant, and the Low-Income Home Energy Assistance Program.

The White House proposal is not something Congress will wholeheartedly support, as indicated by the recent 2018-2019 spending deal calling for higher domestic spending levels than the President wants (see link or figure below, from the Center on Budget and Policy Priorities). But some of the individual proposals it contains have been talked about in Congress and at the state Capitol, even though they would be harmful to Texans.

The federal budget should represent our values as Americans – helping others, caring for our neighbors, working hard and getting compensated fairly for that work. This White House proposal is mean-spirited and not financially sound. We call on our members of Congress to develop a more responsible budget that puts the needs of hard-working Americans and their families first.

Eva DeLuna Castro oversees the Center's work on fiscal and budget policy. She joined the Center in 1998 and focuses primarily on the state budget. Before coming to the Center, she was an Analyst for the Texas Comptroller of Public Accounts, researching various policy issues related to state revenue and spending. She earned a Bachelor of Arts in History and Literature, cum laude, from Harvard University in 1988 and a Master of Public Affairs from the LBJ School of Public Affairs at The University of Texas at Austin in 1997.